The aryl hydrocarbon receptor (AHR), highly expressed in the liver, was originally defined as a xenobiotic receptor that regulates xenobiotic metabolism. Subsequent studies suggest that AhR also has endobiotic functions by affecting physiology and tissue development. In the previous funding period, we have shown that activation of AhR caused spontaneous fatty liver and sensitized mice to methione and choline deficient diet- induced nonalcoholic steatohepatitis. However, whether and how AhR affects dietary induced fatty liver and associated metabolic syndrome such as obesity and insulin resistance remains largely unknown. The fibroblast growth factor 21 (FGF21), produced predominantly in the liver, is a systemic insulin sensitizer. FGF21 exhibits many metabolic benefits, ranging from reducing body weight to alleviation of hyperglycemia and insulin resistance, and improvement of lipid profiles. Although FGF21 was shown to be regulated by the AHR agonist TCDD, the pathophysiological relevance of this regulation remains to be defined. Our preliminary results showed that: 1) Tetracycline inducible transgenic mice expressing the constitutively activated human AHR (CA-AHR) in the liver have been created; 2) CA-AHR transgenic mice showed protection from high-fat diet (HFD) induced obesity and insulin resistance despite having severe fatty liver; 3) Although the transgene was targeted to the liver, CA-AHR transgenic mice exhibited metabolic benefits in extrahepatic tissues, such as the adipose tissue and skeletal muscle; 4) The pleiotropic benefit of AHR activation was associated with the induction of FGF21, and adenoviral knockdown of FGF21 abolished the metabolic benefit of the CA-AHR transgene; 5) FGF21 is a transcriptional target of AHR; 6) The endogenous AhR agonist 6-formy-indolo[3,2-b] carbazole (FICZ) activated AhR efficiently; 7) CA-AHR transgenic mice up to 28 weeks of age did not show signs of spontaneous non-alcoholic steatohepatitis (NASH); and 8) The CA-AHR transgene showed a tendency to reverse the pre-existing insulin resistance. Based on our preliminary data, we hypothesize that the xenobiotic receptor AHR has a previously unrecognized hepatic function in regulating energy metabolism and insulin sensitivity by forming the AHR-FGF21 signaling axis. Specifically, we hypothesize that activation of AHR disassociates fatty liver from insulin resistance and provides metabolic benefits by transcriptionally activating the FGF21 gene. We propose three specific aims to test our hypotheses: 1) To determine whether pharmacological activation of AHR confers metabolic benefits and disassociates fatty liver from insulin resistance; 2) To determine whether genetic and pharmacological activation of AhR relieves pre-existing obesity and insulin resistance; 3) To determine whether FGF21 is necessary for the metabolic benefit of AHR. To our knowledge, the current study represents the first attempt to systematically determine the role of AhR in diet-induced metabolic abnormalities. The tetracycline inducible human AHR transgenic mice represent a unique gain of function model to understand the endobiotic function of AHR without the concern of the toxicity. The AHR-FGF21 axis of endocrine signaling pathway establishes AHR as a pivotal environmental modifier that integrates signals from chemical exposure in the regulation of lipid and energy metabolism. Our results also suggest that development of non-toxic AHR agonists may be a novel approach in managing metabolic syndrome.